One in four women drivers ‘may be priced off road’ by EU equality rule

Young women are most likely to be put off by higher premiums

CLAIRE SMITH

MORE than a quarter of female drivers could be forced off the road after new EU legislation is introduced which will increase car insurance premiums for women by up to 25 per cent, consumer groups have warned.

New rules to be introduced on 21 December will make it illegal for insurance companies to discriminate between male and female drivers when calculating the cost of insurance.

The rise in price is expected to be particularly high for women aged 17 to 25, who at present enjoy much lower premiums than men of a similar age. Young men, meanwhile, are likely to see their premiums fall.

Research from uSwitch suggests more than a third of female drivers (35 per cent) will have to cut living expenses to pay higher premiums, while almost a quarter (24 per cent) say they will have to consider giving up their cars.

Research from the AA indicates one in four people has no idea premiums are about to increase.

The Association of British Insurers (ABI) said it was still not completely clear how much premiums would rise, as insurers would be keen to compete with each other for customers.

A spokesperson for the ABI said: “It is important to remember that the insurance industry fought against this ruling for nearly a decade, but now that we are where we are, insurers are gearing up to offer premiums that are as fair as possible.

“Gender is one factor of many that insurers use to price premiums and while it is hard to say exactly how prices will change, the motor insurance market is very competitive, allowing customers to shop around, and it will remain so despite the gender ban.”

AA insurance specialist Ian Crowder said: “This will have the greatest effect on young women between the ages of 17 and 25. Young men are likely to see their premiums fall a little.

“If you are a young woman who has just got a licence, you should get insurance now.”

He said the insurance industry had fought against the EU ruling, which ends an exemption given to the UK insurance market on gender equality. Insurers argued premiums should reflect risk – and that young men are ten times more likely to be involved in an accident than women of similar age.

Mr Crowder predicted premiums for drivers over the age of 35 would not see much change. And he said insurers were likely to try to get round the restrictions by offering cheaper premiums for female-dominated professions.

Michael Ossei, a personal finance expert at uSwitch.com, said: “Statistically more likely to claim, men have grown used to paying hefty motor insurance premiums, but this is all set to change.

“From next month, men will no longer be penalised for their ‘boy racer’ reputation and will be charged the same as women. For the first time ever, men and women will be driving on a level playing field.

“While millions of male drivers will be celebrating cheaper premiums, female drivers need to brace themselves for significant price rises. It’s more important than ever that they shop around – with over 100 providers on the market, there is a big difference between the cheapest and the most expensive quote.

“A little bit of research will go a long way towards limiting the financial impact of this judgment and not being forced off the road due to cost.”